How to be a better negotiator

by Insurance Business01 Dec 2017

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How to be a better negotiator | Insurance Business

The art of negotiation is one that is truly underestimated in the corporate and small business world – many professionals fixate on playing either good cop or bad cop when it comes to sealing a deal. This turns what is actually a science into a gambling game where the high stakes don’t always pay.

The basic premise of negotiation is to work together with another party to achieve an outcome that works for you both. Rather than come from a traditional stance, where there’s a winner and a loser, it’s best to think flexibly.

Create a third position
It’s important to remember that a negotiation is an exchange of energy. Place two people face to face, and they will feel confronted. Pride, stubbornness and ego can get in the way because each person feels they’re being threatened personally.

Creating a third position, where both people turn to face the problem, diverts the intense energy of each person away from confrontation and focuses their attention on solving the issue. Separating the problem from the person avoids any personality clashes and reduces the chance of offending the other person. Rather than reacting harshly to the other party not wanting to budge from their original offer because they’re ‘stubborn and unreasonable,’ you can instead focus attention on the problem. Take personality out of the equation, and focus on finding a solution rather than becoming defensive and equally unreasonable.

Look for the ‘why’
Most people will make a decision based on reason. Finding out what that reason is can be an invaluable strategy, as it gives you the opportunity to create a solution, often in return for what you want. For example, if a colleague has asked for a three-month extended vacation during the business’ busiest time, you can negotiate on whether they can work remotely via email during some of this period.

Avoid getting personal
No one likes to be attacked personally. Even when you’re negotiating through a third party, you have to assume that this third party may communicate your every word to the person you are trying to settle a deal with. So keep it polite and remember that you’re trying to get them to cooperate.

Playing the blame game or reacting negatively will work against your goals. Even when something doesn’t go your way, stay calm and be respectful, and remember that you may lose in the short term, but as long as your eye is on the prize, your long-term goals should come to fruition.

You also need to avoid thinking the worst of the other party. For example, just because they request that you make an upfront payment before receiving the goods does not mean that they’re going to steal your money. This can be difficult, as you don’t necessarily know the background of the person you’re dealing with in a negotiation. However, assuming the worst of the other person will rarely be productive – and remember, they may actually be thinking the same about you!

Be flexible
The more flexible you can be toward the other party, the more likely they will be willing to give you what you want.

If you can decide what you want before you go into the negotiation, such as your best offer and what terms you can and can’t waver on, you often can give the other party what they want without having to sacrifice your position.

Think of the other person
At the end of the day, a negotiation, however brief, is a relationship. If you fail to consider the other person’s feelings or what they want, then it is unlikely you will have much success.

If they are resolute about particular terms of the negotiation, it can be beneficial to withhold your judgment and put yourself in their shoes. Is there a reason why they’re being so firm? Is there something important to them that you haven’t considered? After all, you might very well do the same thing if you were in their position.

Having some empathy for the other person will often ease the pressure in a negotiation – enough to get them across the line on the other things that are important to you.

Using ‘if’
One of the secrets to a successful negotiation is to never give anything up without asking for something in return, even if it’s small. Using ‘if’ through your negotiation is a good way to handle this.

If I give you … then I would like …I’m happy to give you … if …If you can … then I’d be more than happy to...

Use silence
One of the most effective ways to negotiate is to stay quiet. This may not be appropriate in situations where there are five other parties all trying to win over your potential customer, but it can be invaluable when the other party is poised on a favorable outcome.

When you remain silent, you automatically get the ‘ball in your court,’ so to speak, which leaves you with the power to make the next call. In the meantime, the other party waits in anticipation, hoping they may achieve their outcome. This can create the impression for the other party that the negotiation process may soon end with a good result and they can walk away happy. When you do come back to the table with a counter offer, their anticipation of closing the deal immediately will make the seller more willing to sacrifice items that they may have fought hard to get earlier, all because they’ve seen the light at the end of the tunnel.

Silence can be useful for difficult negotiations, as it can give the time needed for both parties to ‘cool off ’. Sitting back can give you the perspective you need to get a better understanding of the situation and provide you with a long-term view.

Avoid any confusion
Sometimes it can be difficult to draw the line between offering help and asking for business, especially with people with whom you have developed a relationship within a casual setting.

If you feel you’re approaching a level of information that you think you should be charging for, it can be handy to say things like, ‘Call me if you would like to work together on something’, or ‘This is the sort of information I often provide to my client base’; that way, you’re being clear on your expectations for the future without severing the lines of communication altogether.

Strike a pose
While most of us have come across an overbearing tyrant trying to win power by force, an equally destructive force can be approaching a negotiation lacking confidence and presence.

Harvard’s Amy Cuddy has a wonderful presentation on conveying ‘presence’ in front of peers, which shows that it can be as simple as the way you hold your posture before you enter the room. Two minutes with your head up, shoulders back and hands on hips can really provide the confidence you need to stand your ground and muster the courage to ask for what you want.

The biggest misunderstanding surrounding the art of negotiation is in its actual definition. It’s important to remember that negotiation is not used to get the best deal possible or get the most out of someone for the least amount of budget; it’s about coming to the most positive outcome for all parties involved. The origin of the word negotiation comes from the Latin term negotiates, meaning ‘to carry on business,’ and with the right techniques, you will carry on closing deals, securing clients and building relationships.

This is a slightly amended version of an article written by industry expert Josh Masters. It has been shortened to make it suitable for web publishing.